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Johns Hopkins professors sue real estate appraisal company over low valuation of Homeland property

Two Black Johns Hopkins University professors took down family photos and replaced them with pictures of white faces in an effort to increase the value of their home after an initial appraisal fell short of expectation, an outcome they believed was due to race and not the property’s condition.

A different appraisal company valued the house at nearly 60% more when the home appeared to be owned by white people. Now, Hopkins professors Nathan Connolly and Shani Mott are suing the appraisal company for damages citing racial discrimination.

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“Black homeowners regularly see valuations of their homes increase appreciably under whitewashing experiments,” the lawsuit says. “The increased prevalence of whitewashing is responsible for raising awareness of appraisal discrimination.” The couple is represented by John P. Relman, with the law firm Relman Colfax, who did not respond to request for comment.

Their story first appeared in The New York Times on Thursday.

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The named defendants in the case are appraisal company 20/20 Valuations, LLC , its owner and the appraiser who gave them the lower valuation, Shane Lanham. The couple is also suing loanDepot, a California-based mortgage lender, which “knowingly [relied] on that appraisal to deny Plaintiffs a refinance loan and [retaliated] when Plaintiffs explained why the appraisal was discriminatory,” according to the lawsuit.

Connolly, Mott and Lanham did not respond to requests for comment. Asked for comment, loanDepot released a statement.

“We strongly oppose bias in the home finance process and support the plans to combat appraisal bias and promote more sustainable, affordable housing for minority and low- to moderate-income families and communities put forth by the Interagency Task Force on Property Appraisal and Valuation Equity and by the Mortgage Bankers Association,” the statement reads. “While appraisals are performed independently by outside expert appraisal firms, all participants in the home finance process must work to find ways to contribute to eradicating bias.”

The home at the center of the lawsuit is located in Homeland.

The Hopkins couple resides in Homeland, one of Baltimore’s predominantly white, historic neighborhoods, in a four-bedroom house. In mid-2021, the pair reached out to loanDepot to refinance their mortgage. The company required a formal appraisal and contracted with Lanham for the first appraisal. Connolly and Mott left their house as is, decorated with their family photos, African art, a “Black Panther” movie poster and other items showcasing their Black identity.

According to the lawsuit, Lanham’s appraisal “was inconsistent with professional appraisal standards in many ways.” When looking for comparable properties, he chose houses in and out of Homeland, even after confirming that the pair pay dues to the Homeland homeowners association. The comparable property selected outside of Homeland was situated in a predominantly Black neighborhood, which is unnamed in the lawsuit. As for comparable properties within Homeland, the lawsuit alleges Lanham purposefully chose lower-priced homes even when those with higher, more-comparable price tags were located in the same area.

Along the street in Homeland where the professors reside, the houses are for the most part uniform with red brick, white accents and stone pathways leading to the doorways. Surrounding streets in neighborhoods like Lake Evesham and Bellona-Gittings have their own distinct characteristics: white streetlamps instead of Homeland’s black ones, more wooden houses than Homeland’s brick and less homes with garages.

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According to the lawsuit, Lanham appraised the house at $472,000, much lower than loanDepot’s “conservative” estimate of $550,000. The lawsuit contends the appraisal was low due to racial discrimination, but when the couple asked about next steps, they were told they only had 10 days to appeal. In the lawsuit, the couple argues that loanDepot’s stated policy allowed them 60 days to appeal.

“Lanham’s undervaluation of Plaintiffs’ home reflected his belief that, because they are Black, Dr. Connolly and Dr. Mott did not belong in Homeland, an attractive and predominantly white neighborhood,” the lawsuit says. “Lanham’s undervaluation also reflected his belief that Plaintiffs’ home is worth less than other homes in Homeland both because the homeowners are Black and because the home borders the majority Black area in the northeast corner of Homeland.”

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In December 2021, the Maryland Department of Assessments and Taxation assessed the couple’s home at $622,000, so the pair decided to apply for another loan, this time with Swift Home Loans, a Florida-based mortgage lender, as well as different family photos and décor. Pictures of white friends and colleagues went up. African art and references to Black pop culture were traded for “a vintage print featuring a white pin-up model and various stock photographs with white subjects.”

After the changes, the new appraiser valued the property at $750,000, nearly 60% higher than Lanham’s appraisal some seven months earlier. According to the lawsuit, the plaintiffs conducted “no significant improvements” in between appraisals.

The second appraiser, Daniel Dodd, selected homes from Homeland as comparable. Dodd gave the house a 2% adjustment down for being near a busy road, Northern Parkway, whereas Lanham calculated a 10% adjustment, a number the lawsuit claims is inconsistent with appraisal industry standards. Dodd factored in more value for additional finished rooms, the balcony and porch. Lanham credited thousands less for the same features.

As a professor, Connolly focuses on topics such as racism, capitalism and redlining, a discriminatory practice where loans are denied to customers who reside in neighborhoods with large populations of racial and ethnic minorities. Connolly is one of several authors of the book, “Mapping Inequality: ‘Big Data’ Meets Social History in the Story of Redlining.” Mott lectures about Africana studies. The pair have three children.

The lawsuit says the couple continued to fight to change the appraisal even while Mott underwent a cancer diagnosis and treatment because “they determined that it was important to stand up in the face of racial discrimination.”


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